Sorry, the âhiddenâ part was tongue in cheek since i had just discovered the âhide detailsâ function of this forum
hidden
But generally emission based tokens work by bootstrapping so that early stakers (those of us who spun up at 5% commission after launch) get significant benefits, but as they mature and people are universally staked the emissions become functionally useless. One goal should be decreasing excess liquid RPL from early investors, so we should assume that our true RPL APR will dip below 0 if the project is successful. As you said, if the project is successful it will likely raise the price of RPL more than inflation is pulling it down.
So I was using a 10% NO commission assumption, which is what Ken used in the chart and what Rocket Pool devs have said is long term goal. At 10% commission, it is revenue equivalent for solo and minipools at both 16E and 4E amounts (with all those caveats about additional expenses in minipools).
Valdorff's point
So I agree with you. I am biased, I think this is a good investment. I think APR will drop and RPL value will rise. I think the bones are good, the protocol works, the team is solid. but I donât have to convince you, me, or Marceau about rocket pool. If i went on the Solana forum, i would be told to buy their token because the price will rise- itâs an argument that works on people who are already believers. 70% cost for 70% yield increase is less salable to the public than a 10% cost for 10% yield increase, and we are already having a tough time selling our project.
What if we keep the commission at 15%?
So at 15% commission, back of the napkin you get a benefit for both 16E (4.5%) and 4E (17%) over solo stakers. So that helps. However, that cuts into rETH competitiveness over the long run if that commission canât be dropped to 10% or lower; i personally think thatâs not in the best interest of the protocol or the ecosystem (my opinion). I could see a time after mass adoption with 5% rETH commission and 35% commission for NOs- but that would require a lower RPL bond to make sense.
To me, the major problem with Rocket Pool currently is that no one outside of us wants exposure to RPL, and even some of our members question if we need it at all. I think, Marceau, you in particular are acutely aware of this from your whale mating rituals. In order to get people to want RPL, it needs to offer function. Purchase 70% RPL to get 70% extra rewards is not function. Purchase 10% RPL to get 70% extra rewards, for example, is function- the unlocking of the commission, as you mentioned. Those kind of yields can bring in small stakers, whales, and institutional investors because because they are too good to pass up despite the increased costs, risks, taxes, etc. So you are going to wind up with a lot more RPL locked up with a smaller RPL bond. To me, thatâs the best viable path to growth.